AUTHOR’S NAME : Souvik Podder
UNIVERSITY - Bankura University
INTRODUCTION
In Recent times e-commerce has Emerged as a Powerful force driving economic growth globally & India is no exception to this trend. Over the years, the country has Witnessed Significant Development Through the expansion of e-commerce Businesses. The e-commerce landscape in India has witnessed exponential growth, driven by increased internet penetration, smartphone usage & a burgeoning middle-class population. The e-commerce platform has not only created employment opportunities in India but also has given opportunities to small-scale business owners to expand their business internationally, so when this business expands internationally they have to tackle legal challenges. In this blog we will discuss different aspects of legal challenges that these businesses have to face.
NATURE OF LEGAL CHALLENGES
Cross-country businesses can face various challenges due to the complex nature of international Commerce. Some legal challenges are Jurisdiction issues such as determining the jurisdiction for Resolving the Dispute arise in the country, deciding which law is governing and in which forum the dispute is going to be resolved. Dealing with the different legal practices, civil law versus common law and varying Businesses practices can make business transaction, negotiation and Contract Enforcement Difficult. Bridging the GAP between Business and Legal tradition is important for Smooth business transactions. The culture and Language of any nation can play a significant role in the smooth running of business. This is a Point where misunderstanding starts because of the language barrier. To overcome this problem, businesses must set a mechanism where misinterpretation and misunderstanding of contractual agreements can be eliminated. While doing business the corporate body and the individual/associates solve problem every day, with their intellectual from their mind which can be a unique solution to that problem, this is called Intellectual property when a solution to a problem is created through critical analysis by using a human mind it becomes a intellectual property of that individual or the person who register that in his name so, for Protection of intellectual property across borders each nation have their own laws for protecting patents, copyright & trademark etc, businesses should identify the risk associated with it and must take help of professional to understand and comply with those compliances. In India Corporate and Economic laws play a significant role, whenever an entity tries to start a business in a Nation then that entity has to understand the nature of those laws, regulations and by laws like Antitrust laws, Competition law, Bankruptcy laws, Environmental and consumer laws, Banking and finance laws.
DISCUSSING THE LEGAL CHALLENGES SPECIFIC TO INDIA, CHINA & US
- Cross Border Trade Regulation: Each Country has its Unique Regulatory Framework and understanding the complexity is essential for businesses engaging in International trading likewise India, China, and the United States cross-border transactions are influenced by regulations, international agreements, domestic laws, and bilateral and unilateral trade agreements. Let’s talk about custom duties and traffics in all 3 (three) nations India’s GST has streamlined the indirect tax but when it comes to Importing goods the Customs and duties depends on the country of origin of the product, In China, they put import tariffs and VAT value-added taxes on imported goods also the country has introduced Preferential policies for some goods that need to navigate this regulation.
- Consumer Protection Law: Each country has its own set of regulations to protect its citizens from consumer threats INDIA has “The Consumer Protection Act, 2019”, the Act Regulates CCPA Central Consumer Protection Authority which regulates matters related to “Consumer Protection Rights”. It covers issues such as unfair trade practices, misleading advertisements, and product liabilities. In China, there are some other sets of rules like these laws that address issues like Product Quality, Misleading Advertisements, and Dispute Resolution Mechanisms. China has a Specific focus on Regulating E-commerce platforms to ensure Consumer rights are protected in online Transactions. In the U.S. its Multifaceted law includes various Federal and state laws. The Federal Trade Commission FTC plays a crucial role in implementing these regulations. As a whole, the Business has to tackle Compliance related to Jurisdiction variation, Compliance costs associated with it, and Data Privacy and Protection.
- Data Protection & Privacy Laws: CCPA Applies to businesses that process the Personal Data of individuals Residing in California and Businesses that collect Data of people Residing in California. Adhering to CCPA needs proper Implementation and a Person needs professional Knowledge to comply with it or else the Business might face legal issues.
- Logistics and Supply Chain Compliance: International Business Logistic and supply chain plays a crucial role so there are some Compliance related to it, so the business can run smoothly businesses needs to comply with all these compliances, In India it mostly involves Custom regulation, GST, E-Way Bill System, Import and Export License and Trade Agreements, to overcome these challenges businesses need to set strategies that involve comprehensive Research training, Utilize technology, Collaborate with local experts and Regular compliance Audit.
FAMOUS CASE LAWS BASED ON CROSS-BORDER E-COMMERCE TRANSACTIONS: OF INDIA, US, AND CHINA.
INDIA:
Videsh Sancharan Nigam Ltd. vs DCIT – This case involved taxation on income earned from telecommunication services, it highlighted the complexities of determining the tax liability of cross-border transactions, and specifications in the context of telecommunication and E-commerce Services.(Videsh Sanchar Nigam Ltd. vs Joint Commissioner Of Income Tax on 14 September, 2000 (indiankanoon.org))
UNITED STATES:
South Dakota vs Wayfair, Inc – This landmark case overturned the Quill decision. It ruled that states could require online retailers to collect sales tax even if they state. This decision’s significance impacted the landscape of cross-border, E0 commerce taxation in the United States. Attaching both the cases comparatively: (Quill Corp. v. North Dakota :: 504 U.S. 298 (1992) :: Justia US Supreme Court Center) & (South Dakota v. Wayfair, Inc. :: 585 U.S. (2018) :: Justia US Supreme Court Center)
CHINA:
Proview vs Apple (2012) – This case is not directly an E-commerce case but the legal dispute here involves here in trademark rights for the iPad name in China, this case demonstrates the importance of understanding Intellectual property laws and potential legal challenges for multinational companies operating in China. (Apple v Proview dispute settlement (worldipreview.com))
CONCLUSION
The cross border E commerce transaction brings myriad legal challenges that a business must navigate through for a smooth and sustainable business. As we have explored the complexities arising from jurisdictional issues, Cultural and language issues, taxation and custom regulation to data protection and intellectual Property concerns, businesses engage in international trade have to face multifaceted legal landscape that demands careful consideration and strategic planning. As India is witnessing the significant growth in the e-commerce sector, businesses are not only presented with opportunities but also with responsibilities of understanding and adhering to the nuanced legal environment. The expansion of e-commerce has not only spurred economic growth but has also become a catalyst for small scale businesses to reach the international market. However the legal challenges outlined here underscore the significance of robust legal strategies, Compliance framework and an understanding of the intricacies involved in cross-border transactions. China focuses on Protecting consumer rights, business must navigate specific challenges such as data localization laws and e-commerce platform regulations. In the US its multifaceted legal system emphasizes consumer rights and adds another layer of complexity for businesses operating in or expanding into the U.S market.